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Transformation from a product-based model to a platform model<\/a> is a dream for many executives.\u00a0 More and more product companies are now shifting into a platform model.\u00a0 The drive behind such a shift is the huge success of platform companies\u2014e.g., Amazon, Google, and Apple.\u00a0 These organizations started out as a retailer, search engine, and iPod manufacturer respectively, but later transformed into platform models.<\/p>\n However, bringing this transformative vision into reality is anything but straightforward.\u00a0 Research into successful platform businesses reveals that this necessitates a robust approach comprising the following 4 critical phases:<\/p>\n Let\u2019s dive deeper into the first two phases of the approach, for now.<\/p>\n A platform model is not a remedy to resuscitate products that are on a downward slide.\u00a0 It necessitates an attractive product that offers a significant customer base and value to help improve customer loyalty<\/a> and resist rival offerings.\u00a0 The critical mass of customers also allows the platform company to create value for\u2014and attract\u2014third parties that are crucial for the platform to flourish.<\/p>\n Qihoo 360 Technology, a large internet firm in China, commenced its operations in 2006 by selling an antivirus software, 360 Safe Guard. \u00a0To build a broad user base and to gather customers\u2019 feedback on improving the product, the company started giving away the product free. \u00a0The company maintained a list of malware as well as a \u201cwhitelist\u201d of programs that were safe for the users.\u00a0 The critical mass of customers allowed Qihoo to:<\/p>\n The notion that an organization has to embrace either a product-based or a platform-based business model is far from reality. \u00a0Although, both the product-based and platform-based business models need a framework to assign dedicated resources and manage operations, however, Business Transformation<\/a> from a product-based model to a platform-based model gets simplified utilizing a hybrid approach. \u00a0A product-based business model calls for organizations to have differentiated products catering to customers\u2019 needs, to create value. \u00a0Whereas, a platform-based business model creates value by linking users to 3rd parties and charging fees for using the platform. \u00a0The focus of Platform models is on:<\/p>\n For example, Apple converted itself from a product model to a platform model within a year after the launch of the first iPhone.\u00a0 Initially, Apple reacted defensively to any hacking attempts and precluded 3rd<\/sup> party apps on the iPhone, but then decided to create an open platform, and launched the App Store. \u00a0The hybrid model and platform mindset created additional income streams and significant revenue for Apple.<\/p>\n To make a product and business model profitable, the conversion of product users into platform users is of utmost importance.\u00a0 To enable this, an organization needs to develop its platform in such a way that it should present enough additional value for the customers to adopt it and become its users.\u00a0 Three key elements are critical to accomplish this:<\/p>\n If the platform does not offer adequate value for the customers they are not going to embrace it the way they do to a great product.\u00a0 Similarly, addition of new offerings that are coherent with the brand has a strong correlation with new platform adoption. \u00a0New offerings gain traction from a firm\u2019s image and strengthen the brand further.\u00a0 Likewise, allowing 3rd<\/sup> parties to make upgrades, improve product offerings, and develop the platform further helps in rapid conversion, additional revenue, and growth.<\/p>\n Interested in learning more about the phases of the approach to Products-to-Platforms Transformation<\/a>?\u00a0 You can download an editable PowerPoint on Products to Platforms Transformation<\/strong> here <\/u><\/a>on the Flevy documents marketplace<\/a>.<\/p>\n You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library<\/a>. FlevyPro<\/a> is trusted and utilized by 1000s of management consultants and corporate executives. Here’s what some have to say:<\/p>\n “My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today\u2019s market. They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions. I strongly recommend FlevyPro to any consultant serious about success.”<\/p>\n \u2013 Bill Branson, Founder at Strategic Business Architects<\/p>\n<\/blockquote>\n “As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power. For us, it is an invaluable resource to increase our impact and value.”<\/p>\n \u2013 David Coloma, Consulting Area Manager at Cynertia Consulting<\/p>\n<\/blockquote>\n “As a small business owner, the resource material available from FlevyPro has proven to be invaluable. The ability to search for material on demand based our project events and client requirements was great for me and proved very beneficial to my clients. Importantly, being able to easily edit and tailor the material for specific purposes helped us to make presentations, knowledge sharing, and toolkit development, which formed part of the overall program collateral. While FlevyPro contains resource material that any consultancy, project or delivery firm must have, it is an essential part of a small firm or independent consultant’s toolbox.”<\/p>\n \u2013 Michael Duff, Managing Director at Change Strategy (UK)<\/p>\n<\/blockquote>\n “FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients. In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over! The quality of the decks available allows me to punch way above my weight \u2013 it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”<\/p>\n \u2013 Roderick Cameron, Founding Partner at SGFE Ltd<\/p>\n<\/blockquote>\n “Several times a month, I browse FlevyPro for presentations relevant to the job challenge I have (I am a consultant). When the subject requires it, I explore further and buy from the Flevy Marketplace. On all occasions, I read them, analyze them. I take the most relevant and applicable ideas for my work; and, of course, all this translates to my and my clients’ benefits.”<\/p>\n \u2013 Omar Hern\u00e1n Montes Parra, CEO at Quantum SFE<\/p>\n<\/blockquote>\n","protected":false},"excerpt":{"rendered":" Transformation from a product-based model to a platform model is a dream for many executives.\u00a0 More and more product companies are now shifting into a platform model.\u00a0 The drive behind such a shift is the huge success of platform companies\u2014e.g., Amazon, Google, and Apple.\u00a0 These organizations started out as a retailer, search engine, and iPod… 4 Key Ingredients of Transforming Your Organization From A Product-based Business To Platform Business Model<\/span><\/a><\/p>\n","protected":false},"author":110,"featured_media":7271,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"neve_meta_sidebar":"","neve_meta_container":"","neve_meta_enable_content_width":"","neve_meta_content_width":0,"neve_meta_title_alignment":"","neve_meta_author_avatar":"","neve_post_elements_order":"","neve_meta_disable_header":"","neve_meta_disable_footer":"","neve_meta_disable_title":"","footnotes":""},"categories":[81],"tags":[953,2124,2123,2121,2122,2125,2120,824],"class_list":["post-7257","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-strategy","tag-business-models","tag-hybrid-business-model","tag-platform-mindset","tag-platform-based-business-model","tag-product-mindset","tag-product-offerings","tag-product-based-business-model","tag-transformation"],"_links":{"self":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/7257","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/users\/110"}],"replies":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/comments?post=7257"}],"version-history":[{"count":8,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/7257\/revisions"}],"predecessor-version":[{"id":7809,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/7257\/revisions\/7809"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/media\/7271"}],"wp:attachment":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/media?parent=7257"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/categories?post=7257"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/tags?post=7257"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
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<\/a><\/p>\nAttractive <\/strong>Product and Customer Base<\/strong><\/h2>\n
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Hybrid Business Model<\/strong><\/h2>\n
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Rapid Conversion<\/strong><\/h2>\n
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Do You Find Value in This Framework?<\/h2>\n